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Report  of  the  S 
Conf  Pam  #290 

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Aisi  <>iar*e?>^ 


HOUSE  OF  ilEPilESENTATIVES,  May  2fi,  I8G  1.— Laid  on  the 
tabic  and  ordered  to  be  printed. 

[By  Mr.  SiN<;LKft)N,  from  Special  Coniuiittcc.] 


IIEPOKT 


OK   Tilt; 


SPECIAL  COMMITTEE, 

(Ju  the  Paijment  of  Glawii>. 


The  undersignod,  a  majority  of  the  members  of  the  S[)ecial  Com- 
mittee, to  whom  Avas  referred  the  letter  of  the  Secretary  of  the  Treas- 
ury, in  responds  to  certain  resolutions  adopted  by  the  House,  and 
who  were  charged  with  the  duty  of  enquiring  into  the  matter  con- 
tained in  said  resolutions,  beg  leave  to   submit  the  following  report : 

The  committee  addressed  a  letter  to  the  Secretary  of  the  Treas- 
ury; which,  with  his  answer  and  accompanying  papers,  are  laid  be- 
fore the  House. 

It  will  be  seen  by  examination  of  the  5th  section  of  the  currency 
act  of  17th  February,  1864,  that  no  authority  exists  for  paying  out 
of  the  Treasury,  the  old  issue  of  treasury  notes,  after  the  first  day 
of  April  last;  and  this  construction  has  been  very  properly  given  to 
this  section  by  the  Secretary  of  the  Treasury. 

The  Secretary  of  the  Treasury,  however,  takes  this  further  view 
of  said  section,  that  where  a  requisition  has  been  made  by  the  Secre- 
tary of  War,  say  for  one  hundred  thousand  dollars,  and  upon  that 
requisition  a  warrant  has  issued  from  the  Secretary  of  the  Treasury, 
upon  the  Treasurer,  who  keeps  the  funds  of  the.Government,  and  the 
one  hundred  thousand  dollars  had  been  passed  to  the  credit  of  the 
disbursing  officer  pf  the  War  Department,  before  the  first  day  of 
April  last,  and  checks  had  been  given  by  said  disbursing  officer  upon 
that  amount,  that  then  these  checks  are  payable  in  the  old  issue. 


The  undersigned  think  this  a  just  and  proper  construction  of  the 
act  ;  for  although  the  funds  thus  subject  to  the  check  or  checks  of 
the  disbursing  officer,  are  still  in  the  vaults  of  the  Treasury,  yet  they 
are  only  held  as  upon  deposit,  and  when  checks  are  drawn  upon  them, 
they  are  payable  in  the  only  kind  of  currency  in  the  Treasury  at  the 
time  of  the  requisition  warrant,  and  passing  said  funds  to  the  credit 
of  the  disbursing  officer.  Any  other  view  of  the  subject  would  ena- 
ble parties  who  had  contracted  with  the  Government,  and  received 
checks  for  payment  before  the  first  day  of  April  last,  to  evade  the  in- 
tent and  meaning  of  said  act,  by  refusing  to  present  said  checks  for 
payment  before  said  1st  day  of  April,  thus  compelling  their  pay- 
ment in  the  new  issue  after  that  time. 

To  all  such  creditors,  notice  was  given,  by  order  of  the  Secretary 
of  War,  published  in  the  leading  journals  of  the  Confederate  States, 
that  these  checks  or  demands  must  be  presented  before  the  1st  day  of 
April  last,  and  that  they  would  only  be  paid  in  the  old  issue.  In  a 
few  cases,  where  parties  of  this  character  failed  or  refused  to  present 
their  demands,  before  the  first  day  of  April,  as  notified,  they  have 
been  required  to  take  the  old  issue,  which  was  set  apart  for  their  pay- 
ment* and  in  no  other  cases. 

The  undersigned,  therefore,  believe  that  the  Secretary  of  the  Treas- 
ury has  been  guilty  of  no  misfeasance  or  malfeasance  in  office,  in 
respect  to  the  matters  contained  in  said  resolution,  but  that  he  has 
carried  out  the  true  intent  and  meaning  of  said  5th  section  of  the 
currency  act  of  February  17th,  1864.  All  of  which  is  respectfully 
submitted. 

0.  R.  SINGLETON,  >     -,     ,        .  ^ 

RO   JOHNSTON       \    -"^^'^'^"^^^  ^f  (Committee. 


MINORITY  REPORT. 


.J 

4 

The  undersigned,  dissenting  from  the  views  of  the  majority  of  the 
Special  Committee,  submits  the  following  report : 

The  act  of  Congress  of  February  17,  *'to  reduce  the  currency  and 
to  authorize  a  new  issue  of  note<'  and  bonds,"  section  5,  declares, 
•'  that  after  llie  first  day  of  April  next,  all  autliority  heretofore  given 
to  the  Secretary  of  the  Treasury  to  issue  treasury  notes  shall  be,  and 
the  same  is  hereby  revoked,"  and  provides  that  "  the  Secretary  of  the 
Treasury  may,  after  that  time,  issue  new  treasury  notes." 

The  letter  of  the  Secretary  of  the  Treasury  to  the  committee,  now 
communicated  to  the  House,  concedes  a  construction  of  the  law  which 
forbids  the  payment  from  the  Treasury,  after  that  day,  in  any  other 
than  the  new  and  untaxed  notes.  This  inhibition,  however,  he  insists 
is  not  applicable  to  notes  used  in  payment  of  checks  drawn  by  dis- 
bursing officers  of  the  Government  previous  to  the  first  day  of  April, 
and  this  class  of  claims,  whenever  presented,  are  to  be  paid  in  the 
old  issue.  The  funds  reserved  to  meet  these  are  considered  as  de- 
posits merely,  and  not  in  the  Treasury,  and  consequently  when  paid 
out  are  not  ''issued''^  within  the  meaning  of  the  act.  He  has  given 
instructions  to  this  effect,  which  are  still  in  force.  This  view  of  tho 
case  is  sustained  by  the  majority  of  the  comraittc"'. 

The  undersigned,  not  concurring  in  this  construction  of  the  law, 
briefly  presents  the  grounds  of  his  dissent : 

Treasury  notes  are  qualified  contracts,  on  the  part  of  the  Confede- 
rate States,  for  the  payment  of  monc}  to  the  holder,  consummated 
by  their  delivery.  AVhile  in  the  hands  of  ofiicers  of  the  Treasury 
Department  and  undelivered,  they  are  wholly  inoperative  and  involve 
no  obligation. 

They  are  "mwed"  when  they  leave  the  Treasury,  pass  into  private 
hands,  and  are  no  longer  under  the  control  of  the  Government,  its 
officers  or  agents.  They  are  then  delivered  and  become  valid  and 
binding  as  public  engagements.  It  is  immaterial  through  the  hands 
of  how  many  different  officers  of  the  Government  thoy  may  be  trans- 
mitted—  arid  whatever  entiie^-»  in  books  or  instruments  of  writing  may 
be  required  to  protect  the  public  interest  and  ensure  a  just  accounta- 
bility among  these  officers,  so  long  as  the  notes  are  in  the  official 
custody  and  under  the  official  control  of  any  of  them,  and.subject  to 
the  authority  of  the  head  of  the  Department,  they  are  "  in  the  Treas- 
vry,^^  and,  when  paid  out  to  claimants,  are  "  issued.''^  This  is  admit- 
ted in  the  order  for  the  return  of  all  unexpended  amounts  in  the  hands 
of  disbursing  officers,  in  order  that  notes  of  the  new  issue  might  be 
substituted  in  their  place. 

The  correctness  of  the  view  taken  by  the  undersigned  will  appear 
from  several  considerations ; 


1st,  If  Dotcs  reserved  for  such  payments  are  destroyed,  the  loss 
does  not  fall  on  the  disbursing  officer,  nor  the  holder  of  his  check, 
■who  is  his  assignee  for  that  amount,  but  upon  the  Government. 

2d.  In  case  of  an  insufficient  supply  of  treasury  notes  to  meet 
these  claims,  or  its  reduction  from  any  cause  below  the  credit,  the 
deficiency  must  be  made  up  from  the  resources  of  the  Treasury,  and, 
if  necessary,  by  the  preparation  and  execution  of  other  notes,  and 
this  can  be  done  only  under  the  authority  of  the  act. 

3d.  The  notes,  up  to  the  moment  of  being  paid  out,  remain  in  ex- 
clusive custody  and  under  the  sole  contrt)l  of  officers  of  the  Govern- 
ment, directly  responsible  to  its  head. 

4th.  The  order. for  the  return  of  balances  in  the  bauds  of  disbursing 
officers  and  other  public  agents,  on  the  first  day  of  April,  admits  that 
they  have  not  been  issued,  and  after  that  day  cannot  rightfully  be  issued. 

5th.  The  currency  act  taxes  such  notes  as  were  outstanding  on  the 
1st  day  of  April,  in  the  hands  of  those 4o  whom  they  belong,  and  not 
such  as  were  then  in  the  hands  of  officers  of  the  Government,  for  dis- 
bursement.^ The  instruction  -of  the  Secretary  taxes  the  latter,  or 
■which  is  the  same  thing,  taxes  a  certain  class  of  claims  on  the  Gov- 
ernment, neither  of  which  finds  any  warrant  in  the  law. 

The  undersigned,  therefore,  is  of  opinion  that  checks  of  disbursing 
officers,  drawn  before  the  first  day  of  April,  like  all  other  forms  of 
claim  upon  the  Confederata  States,  can  be  legally  paid  only  in  the 
new  issue  of  treasury  notes. 

W.  N.  IT.  SMITH. 


Treasury  Department,  C.  S.  A.,  ) 

Bichmmid,  May  10,  1864.      \     , 

Hon.  T.  S.  Bocock: 

Sir:  I  have  had  the  honor  to  receive  the  following  resolutions  from 
the  House  of  Representatives : 

^^  Resolved,  That  the  Secretary  of  the  Treasury  be  requested  to 
inform  tlie  House — 

^'  FIn.f,  Whether  any  demands  a«^ainst  the  (government,  ascertained 
or  accruing  previous  to  the  first  day  of  April  last,  and  presented  for 
payment  since,  have  been  paid  in  treasury  notes  of  the  old  issue, 
rated  at  the  amount  specified  on  their  face  ;   or — 

"Second,  In  treasury  notes  of  the  new  issue  on  condition  of  the 
abatement  of  one-third  of  the  claim,  and  the  acceptance  of  two-third^ 
in  satisfaction  thereof; 

"  Third,  And  if  so,  under  whose  and  what  orders,  and  by  what 
authority  of  law,  such  payments  have  been  made,  and  such  notes  of 
the  old  emission  been  re- issued  since  said  date, 

"  Fourth,  And  if  any  such  orders  have  been  given,  whether  the 
same  have  been  made  applicable  to  claims  made  by  the  States,  as  well 
as  to  those  due  individuals." 

I  respectfully  inform  the  House  that  I  have  no  knowledge  or  infor- 
mation as  to  any  such  payments  or  arrangements  as  are  mentioned  in 
the  resolution. 

C.  G,  MEMMINGER, 
Secretary  ^'  tlie  Treasury. 


Treasury  Department,  ) 

RuJimond,  May  19,  1804.  \ 

Hon.  W.  N.  H.  Smith, 

Chairman  Committee  Honse  of  liepresentatives  : 

Sir  :  I  h^ave  the  honor  to  acknowledge  the  receipt  of  your  letter  of 
17th  instant,  transmitting  copy  of  resolution  of  the  Honse  of  Repre- 
sentatives, under  which  a  Special  Committee  has  been  appointed  to 
obtain  information  as  to  matters  contained  in  a  resolution  of  the  House 
already  answeied  by  this  Department;  and  asking  information  upon 
certain  specific  points  now  presented. 

These  specific  enquiries  enable  the  Secretary  to  see   what  was  the 
purpose  of  the  first  enquiry ;  and  a  little  explanation  of  the  forms  of 
business  will  show  the  reason  why  no  satisfactory  information  upon ' 
the  points  presented  can  be  had  at  the  Treasury  Department. 

Payments   at  the  Treasury  are  made  in  two  modes :     First,   upon 


claims  regularly  audi  teil  and  passed;  and,  secondly,, upon  requisitions 
made  by  the  diftereut  departments  in  favor  of  disbursing  ofiicers.  The 
first  class  are  audited  and  paid  as  demands  upon  the  Treasury,  The 
second  class  are  paid  in  the  following  manner.  The  Secretary  of  War, 
for  example,  makes  a  requisition  for  one  hundred  thousand  dollars,  to 
be  placed  in  the"  hands  of  a  quartermaster.  Upon  this  requisition,  a 
treasury  warrant  is  issued,  and  upon  the  receipt  of  the  quartermaster, 
the  treasurer  hands  to  him  or  passes  to  his  credit  the  amount,  and 
charges  him  with  the  same.  The  money  has  thus  passed  out  of  the 
Treasury  and  stands  to  his  credit  as  a  deposit,  subject  to  his  check. 
He  checks  for  it  at  pleasure,  and  the  Treasury  office  has  nO  knowledge 
or  information  as  to  the  demands  for  account  of  Avhich  the  check  is 
drawn.  In  accounting  afterwards  with  the  Auditor,  the  quartermas- 
ter discharges  himself  by  pro(^luction  of  vouchers  for  demands  paid, 
but  no  reference  is  had  to  the  checks  which  may  have  been  used  to 
pay  the  same.  Thus,  it  will  appear  that  if  a  requisition  were  carried 
to  the  credit  of  a  disbursing  officer  prior  to  the  1st  April,  a  check  on 
that  credit  necessarily  called  for  payment  in  the  funds'  then  standing 
at  his  credit.  To  enable  the  disbursing  officer  to  use  the  currency,  it 
became  necessary  that  he  should  return  the  old  currency  into  the 
Treasury  and  procure  another  requisition  for  new.  So  long,  however, 
as  the  officer  drew  checks  on  the  old  balance,  they  would  be  paid  in 
the  funds  which  that  balance  represented ;  and  the  Treasury  Depart- 
ment could  not  know  what  demands  were  paid  by  these  checks,  or 
whether  any  specific  arrangement  or  abatement  had  been  agreed  upon 
between  the  creditor  and  the  disbursing  officer. 

With  this  explanation,  I  proceed  to  answer  the  enf(uiries  contained 
in  your  note : 

1.  In  answer  to  the  first  enquiry,  I  would  respectfully  state  that  the 
printed  paper,  herewith  submitted,  bearing  date  23d  February,  1864, 
sets  forth  the  general  regulations  for  carrying  into  eftect  the  act  to 
reduce  the  currency.  No  specific  instruction  is  contained  therein  as 
to  demands  against  the  Treasury,  due  before  and  presented  after  the 
1st  April  last.  It  was  thought  that  the  5th  section  of  the  act  Avas  suf- 
ficiently distinct  to  forbid  any  payment  after  1st  April  in  old  notes. 
A  few  cases  came  up  in  which  depositaries  enquired  whether  interest 
coupons,  payable  before  1st  April,  and  presented  after  lat  April,- 
should  be  paid  in  old  or  new  issues,  and  they  were  instructed  to  pay  in 
new  issues.  A  copy  of  a  telegram  to  the  Assistant  Treasurer  at 
Charleston,  dated  26 th  April,  is  herewith  submitted. 

2.  In  answer  to  the  second  enquiry,  I  would  respectfully  refer  to 
the  explanation  above  made.  The  regulations  of  9th  March  and  19th 
April,  were  issued  in  conformity  with  these  views,  and  with  the  ex- 
planatory note  of  the  officer  of  the  Treasury,  (all  of  whiih  are  here- 
with submitted,)  will  give  all  the  information  in  possession  of  the 
Department. 

3.  The  third  enquiry  does  not  discriminate  between  payments  made 
by  disbursing  officers  and  those  made  at  the  Treasury.  As  to  the 
former,  information  can  only  be  had  from  the  Department  to  which 
those  officers  belong,     The  Treasury  (as  already  explained,)  have  no 


information  on  the  subject.  All  demands  paid  at  the  Treasury  sub- 
sequent to  the  1st  April,  have  been  paid  in  new  issue,  except  in 
the  single  case  of  checks,  drawn  by  disbursing  officers  on  balances 
standing  at  their  credit  on  1st  April,  and  not  returned  into  the  Treas- 
ury. 

1.  The  fourth  enquiry  is  fully  answered  in  the  answer  to  the  3d. 

5.  So  with  the  oth. 

6.  In  concluding,  the  Secretary  would  respectfully  state,  that,  in  his 
view  of  the  law,  no  old  currency  can  be  issued  after  the  1st  April, 
and  as  far  as  he  knows,  none  has  been.  Whether  disbursing  officers 
may  or  may  not  have  acted  under  mistaken  views  of  the  law,  he 
cannot  say.  So  far  as  the  Treasury  officers  are  concerned,  upon  no- 
tice of  any  such  mistake,  he  would  promptly  correct  it.  He  fully  re- 
cognizes the  right  of  Congress  to  enquire  into  and  correct  all  such 
errors  or  abuses,  and  would  most  readily  make  any  further  enquiries 
to  ascertain  and  correct  any  which  may  be  pointed  out  in  any  officer 
of  his  Department. 

Very  respectfully,  your  obeeient  servant, 

C.  G.  MEMMINGER, 

Secretary  of  Treasury. 


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